Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.21.2
Debt
 9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
DEBT DEBT
The following is a summary of the Company's debt facilities and balances as of September 30, 2021 and December 31, 2020:
Total Commitment
 or Original Principal		 Quarterly Principal Payments September 30, 2021 December 31, 2020
Maturity
Date		 Amount Outstanding Interest
Rate		 Amount Outstanding Interest
Rate
Crimson Secured Credit Facility:
Crimson Revolver $ 50,000,000  $ —  2/4/2024 $ 28,000,000  4.08  % $ —  —  %
Crimson Term Loan 80,000,000  2,000,000  2/4/2024 76,000,000  4.08  % —  —  %
Crimson Uncommitted Incremental Credit Facility 25,000,000  —  2/4/2024 —  —  % —  —  %
CorEnergy Secured Credit Facility (1):
CorEnergy Revolver 160,000,000  —  7/28/2022 —  —  % —  2.89  %
MoGas Revolver 1,000,000  —  7/28/2022 —  —  % —  2.89  %
Omega Line of Credit (2)
1,500,000  —  4/30/2021 —  —  % —  4.14  %
5.875% Unsecured Convertible Senior Notes
 120,000,000  —  8/15/2025 118,050,000  5.875  % 118,050,000  5.875  %
Total Debt $ 222,050,000  $ 118,050,000 
Less:
Unamortized deferred financing costs on 5.875% Convertible Senior Notes
 $ 322,678  $ 385,131 
Unamortized discount on 5.875% Convertible Senior Notes
 2,225,918  2,656,739 
Unamortized deferred financing costs on Crimson Secured Credit Facility (3)
1,427,667  — 
Total Debt, net of deferred financing costs $ 218,073,737  $ 115,008,130 
Debt due within one year $ 8,000,000  $ — 
(1) The CorEnergy Secured Credit Facility was terminated on February 4, 2021 in connection with the Crimson Transaction described in Note 3 ("Acquisitions").
(2) The Omega Line of Credit was terminated on February 4, 2021 in connection with the Crimson Transaction described in Note 3 ("Acquisitions").
(3) Unamortized deferred financing costs related to the Company's revolving credit facilities are included in Deferred Costs in the Assets section of the Consolidated Balance Sheets. Refer to the "Deferred Financing Costs" paragraph below.
Crimson Credit Facility
On February 4, 2021, in connection with the Crimson Transaction, Crimson Midstream Operating and Corridor MoGas, (collectively, the "Borrowers"), together with Crimson, MoGas Debt Holdco LLC, MoGas, CorEnergy Pipeline Company, LLC, United Property Systems, Crimson Pipeline, LLC and Cardinal Pipeline, L.P. (collectively, the "Guarantors") entered into the Crimson Credit Facility with the lenders from time to time party thereto and Wells Fargo Bank, as administrative agent for other participating lenders. The Crimson Credit Facility provides borrowing capacity of up to $155.0 million, consisting of: a $50.0 million revolving credit facility ("Crimson Revolver"), an $80.0 million term loan ("Crimson Term Loan") and an uncommitted incremental credit facility of $25.0 million. Upon closing of the Crimson Transaction described in Note 3 ("Acquisitions"), the Borrowers drew the $80.0 million Crimson Term Loan and $25.0 million on the Crimson Revolver. Subsequent to the initial closing, on March 25, 2021, Crimson contributed all of its equity interests in Crimson Midstream Services, LLC and Crimson Midstream I Corporation to Crimson Midstream Operating, and, effective as of May 4, 2021, such subsidiaries have become additional Guarantors pursuant to the Amended and Restated Guaranty Agreement and parties to the Amended and Restated Security Agreement and (in the case of Crimson Midstream I Corporation) the Amended and Restated Pledge Agreement.
The loans under the Crimson Credit Facility mature on February 4, 2024. The Crimson Term Loan requires quarterly payments of $2.0 million in arrears on the last business day of March, June, September and December, commencing on June 30, 2021. Subject to certain conditions, all loans made under the Crimson Credit Facility shall, at the option of the Borrowers, bear interest at either (a) LIBOR plus a spread of 325 to 450 basis points, or (b) a rate equal to the highest of (i) the prime rate established by the Administrative Agent, (ii) the federal funds rate plus 0.5%, or (iii) the one-month LIBOR rate plus 1.0%, plus a spread of 225 to 350 basis points. The applicable spread for each interest rate is based on the Total Leverage Ratio (as defined in the Crimson Credit Facility); however, the initial interest rate is set at the top level of the pricing grid until the first compliance reporting event for the period ended June 30, 2021.
Outstanding balances under the facility are guaranteed by the Guarantors pursuant to the Amended and Restated Guaranty Agreement and secured by all assets of the Borrowers and Guarantors (including the equity in such parties), other than any assets regulated by the CPUC and other customary excluded assets, pursuant to an Amended and Restated Pledge Agreement and an Amended and Restated Security Agreement. Under the terms of the Crimson Credit Facility, the Borrowers and their restricted subsidiaries will be subject to certain financial covenants commencing with the fiscal quarter ended June 30, 2021 as follows (i): the total leverage ratio shall not be greater than: (a) 3.00 to 1.00 commencing with the fiscal quarter ended June 30, 2021 through and including the fiscal quarter ending December 31, 2021; (b) 2.75 to 1.00 commencing with the fiscal quarter ending March 31, 2022 through and including the fiscal quarter ending December 31, 2022; and (c) 2.50 to 1.00 commencing with the fiscal quarter ending March 31, 2023 and for each fiscal quarter thereafter and (ii) the debt service coverage ratio, shall not be less than 2.00 to 1.00.
Cash distributions to the Company from the Borrowers are subject to certain restrictions, including without limitation, no default or event of default, compliance with financial covenants, minimum undrawn availability and available free cash flow. The Borrowers and their restricted subsidiaries are also subject to certain additional affirmative and negative covenants customary for credit transactions of this type. The Crimson Credit Facility contains default and cross-default provisions (with applicable customary grace or cure periods) customary for transactions of this type. Upon the occurrence of an event of default, payment of all amounts outstanding under the Crimson Credit Facility may become immediately due and payable at the election of the Required Lenders (as defined in the Crimson Credit Facility).
Contractual Payments

The remaining contractual principal payments as of September 30, 2021 under the Crimson Credit Facility are as follows:
Year Crimson Term Loan Crimson Revolver Total
2021 $ 2,000,000  $ —  $ 2,000,000 
2022 8,000,000  —  8,000,000 
2023 8,000,000  —  8,000,000 
2024 58,000,000  28,000,000  86,000,000 
2025 —  —  — 
Thereafter —  —  — 
Total Remaining Contractual Payments $ 76,000,000  $ 28,000,000  $ 104,000,000 

Subsequent to September 30, 2021, Crimson Midstream Operating and Corridor MoGas, Inc. borrowed an additional $3.0 million under the Crimson Revolver on October 14, 2021, then on October 22, 2021 made a prepayment of the $3.0 million Base Rate Advance on the Crimson Revolver so there is no change in outstanding borrowings under the Crimson Revolver.
CorEnergy Credit Facility
On July 28, 2017, the Company entered into an amendment and restatement of the CorEnergy Credit Facility with Regions Bank, as lender and administrative agent for other participating lenders (collectively, with the Agent, the "Lenders"). The amended facility provided for borrowing commitments of up to $161.0 million, consisting of (i) $160.0 million on the CorEnergy Revolver, subject to borrowing base limitations, and (ii) $1.0 million on the MoGas Revolver.
On February 4, 2021, in connection with the acquisition of Crimson, the Company terminated the CorEnergy Credit Facility. On the date of termination, there was no indebtedness outstanding under this facility, and the loan documents providing for the facility, and the security interests securing it, were terminated and released. The termination of the CorEnergy Credit Facility resulted in the write-off of the remaining deferred financing costs of $862 thousand, which is recorded as a loss on extinguishment of debt in the Consolidated Statement of Operations for the nine months ended September 30, 2021.
Deferred Financing Costs
A summary of deferred financing cost amortization expenses for the three and nine months ended September 30, 2021 and 2020 is as follows:
For the Three Months Ended For the Nine Months Ended
September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Crimson Credit Facility $ 247,635  $ —  $ 651,669  $ — 
CorEnergy Credit Facility —  143,636  $ 47,879  $ 430,906 
Amended Pinedale Term Credit Facility —  —  —  26,410 
Total Deferred Debt Cost Amortization Expense (1)(2)
$ 247,635  $ 143,636  $ 699,548  $ 457,316 
(1) Amortization of deferred debt issuance costs is included in interest expense in the Consolidated Statements of Operations.
(2) For the amount of deferred debt cost amortization relating to the convertible notes included in the Consolidated Statements of Operations, refer to the Convertible Note Interest Expense table below.
Convertible Debt
5.875% Convertible Notes
On August 12, 2019, the Company completed a private placement offering of $120.0 million aggregate principal amount of 5.875% Convertible Senior Notes due 2025 (the "5.875% Convertible Notes") to the initial purchasers of such notes for cash in reliance on an exemption from registration provided by Section 4(a)(2) of the Securities Act. The initial purchasers then resold the 5.875% Convertible Notes for cash equal to 100 percent of the aggregate principal amount thereof to qualified institutional buyers, as defined in Rule 144A under the Securities Act, in reliance on an exemption from registration provided by Rule 144A. The 5.875% Convertible Notes mature on August 15, 2025 and bear interest at a rate of 5.875 percent per annum, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2020.
The 5.875% Convertible Notes were issued with an initial purchasers' discount of $3.5 million, which is being amortized over the life of the notes. The Company also incurred approximately $508 thousand of deferred debt costs in issuing the 5.875% Convertible Notes, which are also being amortized over the life of the notes.
Holders may convert all or any portion of their 5.875% Convertible Notes into shares of the Company's Common Stock at their option at any time prior to the close of business on the business day immediately preceding the maturity date. The initial conversion rate for the 5.875% Convertible Notes is 20.0 shares of Common Stock per $1,000 principal amount of the 5.875% Convertible Notes, equivalent to an initial conversion price of $50.00 per share of the Company's Common Stock. Such conversion rate will be subject to adjustment in certain events as specified in the Indenture.
The Indenture for the 5.875% Convertible Notes specifies events of default, including default by the Company or any of its subsidiaries with respect to any debt agreements under which there may be outstanding, or by which there may be secured or evidenced, any debt in excess of $25.0 million in the aggregate of the Company and/or any such subsidiary, resulting in such indebtedness becoming or being declared due and payable prior to its stated maturity.
On April 29, 2020, the Company repurchased approximately $2.0 million face amount of its 5.875% Convertible Notes. As of September 30, 2021, the Company has $118.1 million aggregate principal amount of 5.875% Convertible Notes outstanding.
Convertible Note Interest Expense
The following is a summary of the impact of convertible notes on interest expense for the three and nine months ended September 30, 2021 and 2020:
Convertible Note Interest Expense
For the Three Months Ended For the Nine Months Ended
September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
 
7.00% Convertible Notes:
Interest Expense $ —  $ —  $ —  $ 55,331 
Discount Amortization —  —  —  6,681 
Deferred Debt Issuance Amortization —  —  —  1,141 
Total 7.00% Convertible Notes
 $ —  $ —  $ —  $ 63,153 
5.875% Convertible Notes:
Interest Expense $ 1,733,859  $ 1,733,859  $ 5,201,577  $ 5,239,129 
Discount Amortization 143,607  143,607  430,821  433,932 
Deferred Debt Issuance Amortization 20,818  20,818  62,454  62,905 
Total 5.875% Convertible Notes
 $ 1,898,284  $ 1,898,284  $ 5,694,852  $ 5,735,966 
Total Convertible Note Interest Expense $ 1,898,284  $ 1,898,284  $ 5,694,852  $ 5,799,119 
Including the impact of the convertible debt discount and related deferred debt issuance costs, the effective interest rate on the 5.875% Convertible Notes is approximately 6.4 percent for each of the three and nine months ended September 30, 2021 and 2020, respectively.